CFD (Contract for Difference) Definition
CFD is an abbreviation of the term “Contract for Difference”. It’s a contract that allows investors to speculate on the price of a variety of different markets (forex, stocks etc.) without ever having to actually own them or physically possess them. Because the price of the contract is given meaning from the assets the contract is based on, CFDs are a type of derivative. For the CFD to take place, two parties are required, i.e. you (the trader) and your broker. There are a lot of advantages and disadvantages of trading CFDs as opposed to other types of investment. They are considered a complex and high-risk product. cTrader is a CFD trading platform.
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